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Weekly Mar ket Review August 07, 2015 Spectrum Securities (pvt.) Limited KSE crossed all time high owing to 12 year low inflation figure The week started with the announcement of inflation for the month of July. The Consumer Price Index (CPI) continued to maintain its level at lower side as it stood at 1.8pc YoY in July, which is the lowest level in last twelve years, primarily due to a decline in oil prices and food inflation. The CPI increased 0.4%MoM in July as compared to 0.6%MoM in June. A lower inflation figure pushed up buying appetite among investors for leveraged stocks arising from expectation on further discount rate cut in impending Monetary Policy and led the index to cross the resistance level of 36,000pts (6th Aug'15) reaching new peak at 36,472pts. WEEKLY FIPI SECTOR WISE Se ctor Total Weeky (USD mn) Fertil izer 10.05 O il and Gas Exp. 2.96 Commer ci al Banks 2.85 Food and Per. Care 0.90 Tech and Comm 0.83 O il and Gas Market 0.37 Texti le Composi te (0.18) Power Gen. and Dist (1.38) All other Sectors (3.84) C em en t (7.65) Total 4. 90 The global commodity market has witnessed a moderate recovery which was well received by the market participants in the local bourse also. Oil stocks also returned to green and contributed in upward trajectory of the index due to expected inventory gains and anticipated positive earnings from refineries' isomerization expansion plan. Also, OGDC gained on news regarding discovery of oil at District Chakwal producing 180bbl/day. The Auto sector's stocks rallied on anticipation of improved July car sales while investors were also remain interested in selected banking, cement and fertilizer stocks ahead of corporate result announcements and potential gain from expected discount rate cut. Furthermore, World Bank appreciation regarding Government's effort to uplift the economy boosted investors' sentiments. According to the Managing Director of World Bank "confidence of the public and private sector in Pakistan has been restored and the bank is looking forward to increasing cooperation with the country". World Bank has also offered a $2bn assistance package for a four year period. Finance Minister Ishaq Dar has also assured World Bank that Pakistan will completely banish the menace of circular debt in the near future, this reassurance was also extolled by investors. The talks with IMF have been completed in Dubai on the eighth review under Extended Fund Facility (EFF) and It is expected that Pakistan may receive a tranche of over $500mn in next week. Ishaq Dar has also informed the representatives of IMF about the revived privatization efforts of the government. Source: NCCPL, Spectrum Research Abdul Azeem [email protected] + 92 (21) 32467598 www.spectrumonline.com.pk Page 1 of 2 Weekly Mar ket Review August 07, 2015 Spectrum Securities (pvt.) Limited The market on Friday closed on 36,223pts which was (up 1.35%WoW) more than the closing of last week which was 35,742pts. The local investors also took cue from recent development and remained net buyer this week with a net inflow of $4.9mn as compared to $3.03mn last week (up 62%WoW). The average daily traded volume for the week ticked at 151mn shares in comparison with 162mn shares last week. Outlook: Positive The foreign reserves of the country hits all time high of $18.88bn in the week ending 31st July, the applauding of economic efforts by esteemed organizations like credit rating agencies, IMF, World Bank among others all point towards positive journey for the reviving economy and we remain optimistic about the macro-economic situation of the country. The performance of the stock market is very sensitive to corporate result announcements and upcoming MPS. We expect inflation for the year to pick up slightly, led by increased energy tariff. Even though in near future the index will continue its upward journey in our opinion it can also face some corrections. We believe international oil prices among other commodity prices can exert pressure on the index. We advise investors to accumulate only fundamentaly strong stocks. We are remain positive on Cement, Banks, Refinery, Automobile & Textile Sector. www.spectrumonline.com.pk Page 2 of 2 Weekly Mar ket Review August 07, 2015 Spectrum Securities (pvt.) Limited About the Company: The company Spectrum Securities (Private) Limited was acquired from M/S Mazhar Hussain Securities (Private) Limited. Mazhar Hussain Securities (Private) Limited was constituted in December 19, 2000. Later, Spectrum Securities took over Mazhar Hussain Securities on October 27, 2014 and registered in the name of Spectrum Securities(Private) Limited. The management of spectrum securities has stepped into the industry with its agenda to attract the Corporate Clients therefore they decided to come up with the new outlook, introducing a new management team of professionals. Spectrum Securities (Private) Limited is TREC Holder of Karachi Stock Exchange Limited and Lahore Stock Exchange Limited. Disclaimer: This report is for information purposes only and does not constitutes an offer, or invitation to make an offer, to buy or sell any securities. All facts and figures have been taken from the sources that are considered reliable. This report is prepared for the use of Spectrum Securities clients and Spectrum Securities reserves the right for its distribution. Opinions and recommendations provided does not take into account specific investment objectives or particular investment needs of any specific person or group of persons who may receive this report. Analyst Certification: I, Abdul Azeem, certify that all the views expressed in this report about the subject matter are an accurate depiction of my personal views and no part of my compensation or any other benefits, was/will be, directly or indirectly, related to the specific recommendation expressed in this report. Furthermore, I do not hold any beneficial holding in the scrip.